I have moved my blog to the K&H web site- Please click here:
http://www.kandh.co.uk/changingthenumbersblog.htm
Thank you.
Monday, 18 February 2008
Monday, 28 January 2008
Selling your business- when and how
Despite all the talk of recession, there seem to be a lot of talk at the moment about selling businesses. (Interestingly though, no one is talking about buying business, so who are sellers going sell to?)
The reason for this mainly seems to be the increase in the tax rate by 80% from 6.4.08 (for most business owners the rate of tax goes from 10% to 18%). My feeling is that by rushing a deal through before 6.4.08 to save tax is likely to be a false economy- the buyer's bargaining position will be much stronger if he or she knows that the seller is working to a deadline.
But there is another less urgent reason. This was highlighted in a recent E-Myth Worldwide newsletter. This looked at the demographics of typical business owners, mainly in the US but the same applies in the UK.
If you own a small business, you are probably a baby boomer aged between 43 and 61 years old. The article goes on to say:
"Whatever your age, be aware of the coming tide of businesses for sale as boomer business owners retire, liquidating businesses for retirement assets.
What are your plans for your business? ...sell soon ? ...sell later ? ...have the kids take over ? ...just close the doors ?
A solid exit strategy will anticipate trends and steer towards your favoured goals. And having documented systems in place will increase your business' value, and will ease the transition to new ownership.
What's Your Exit Strategy? It was Benjamin Franklin who said "By failing to prepare you are preparing to fail." We recommend that you design an exit strategy before the market is awash with businesses for sale. Perusal of the popular press turns up numerous articles on this coming tide, as do web searches on terms like "boomers selling their business". The approaching events are clearly on the radar of mergers and acquisitions firms and financial advisors.
PriceWaterhouseCoopers found half of US business owners plan to sell in the next decade. Another source expects 40% of family-owned US businesses to sell within five years. What should you be doing now? Factors favorable to sellers include times of economic expansion, low capital gains tax rates and low interest rates. Negotiate cautiously, as small business owners are likely to sell exactly one business per lifetime, while active corporate buyers work multiple deals each year.
Consider that
- Active buyers have the advantage in business valuation and negotiation
- Business-valuation-by-owner is often low, typically minimizing profits for taxes' sake
- Business owners are often impatient to sell
- A vital negotiating point is the strength of your documented business systems and financial statements. Turnkey systems add to a business' value and ease the assumption of control by new owners. In this area particularly, an E-Myth'd business will have a value significantly higher than a similar business without documented systems."
Many of the business owners I speak to have an unrealistic idea about what their business may be sold for. It is never too early to start thinking about the steps that need to be taken to increase the value of your business.
Why not come to the next K&H BBF, the title of which is, coincidentally, based on the Benjamin Franklin quote "Business Planning - Failing to Plan is Planning to Fail". This is on 13.2.08 - see here for details- http://www.kandh.co.uk/bbf.htm. I hope to see you there so you can tell me what plans you have to sell your business.
The reason for this mainly seems to be the increase in the tax rate by 80% from 6.4.08 (for most business owners the rate of tax goes from 10% to 18%). My feeling is that by rushing a deal through before 6.4.08 to save tax is likely to be a false economy- the buyer's bargaining position will be much stronger if he or she knows that the seller is working to a deadline.
But there is another less urgent reason. This was highlighted in a recent E-Myth Worldwide newsletter. This looked at the demographics of typical business owners, mainly in the US but the same applies in the UK.
If you own a small business, you are probably a baby boomer aged between 43 and 61 years old. The article goes on to say:
"Whatever your age, be aware of the coming tide of businesses for sale as boomer business owners retire, liquidating businesses for retirement assets.
What are your plans for your business? ...sell soon ? ...sell later ? ...have the kids take over ? ...just close the doors ?
A solid exit strategy will anticipate trends and steer towards your favoured goals. And having documented systems in place will increase your business' value, and will ease the transition to new ownership.
What's Your Exit Strategy? It was Benjamin Franklin who said "By failing to prepare you are preparing to fail." We recommend that you design an exit strategy before the market is awash with businesses for sale. Perusal of the popular press turns up numerous articles on this coming tide, as do web searches on terms like "boomers selling their business". The approaching events are clearly on the radar of mergers and acquisitions firms and financial advisors.
PriceWaterhouseCoopers found half of US business owners plan to sell in the next decade. Another source expects 40% of family-owned US businesses to sell within five years. What should you be doing now? Factors favorable to sellers include times of economic expansion, low capital gains tax rates and low interest rates. Negotiate cautiously, as small business owners are likely to sell exactly one business per lifetime, while active corporate buyers work multiple deals each year.
Consider that
- Active buyers have the advantage in business valuation and negotiation
- Business-valuation-by-owner is often low, typically minimizing profits for taxes' sake
- Business owners are often impatient to sell
- A vital negotiating point is the strength of your documented business systems and financial statements. Turnkey systems add to a business' value and ease the assumption of control by new owners. In this area particularly, an E-Myth'd business will have a value significantly higher than a similar business without documented systems."
Many of the business owners I speak to have an unrealistic idea about what their business may be sold for. It is never too early to start thinking about the steps that need to be taken to increase the value of your business.
Why not come to the next K&H BBF, the title of which is, coincidentally, based on the Benjamin Franklin quote "Business Planning - Failing to Plan is Planning to Fail". This is on 13.2.08 - see here for details- http://www.kandh.co.uk/bbf.htm. I hope to see you there so you can tell me what plans you have to sell your business.
Wednesday, 19 December 2007
Does money make you happy? No work does!
Much is spoken about the importance of goals and goal setting in business and in life in general.
It is rare that anyone takes a step back and asks why we are striving for the things that goals are suppose to give us.
In other words, will having goals make you happy (assuming that happiness is everyone's ultimate aim, for ourselves and for others)?
A book I have just read called "Happier" (by Tal Ben-Shahar) examines this in more detail and draws some interesting conclusions that all of us who are involved in giving business advice should, I believe, keep in the back of their minds when giving that advice. In a nutshell:
- Happiness as a result of pleasure and purposefulness in life (just one or the other of these is not enough)
- Purposefulness can come from striving for goals (not from achieving them!)
- BUT the goals must be "self concordant" ie consistent with our own personal values and beliefs
- When we are working towards a goal, we can get into a state of "flow", where the balance between boredom and stress is just right and when time passes very quickly.
- We have more of these "flow" experience at work than during our leisure time.
- Money does not create happiness (except in so far as money is the measure by which you judge your progress towards your goals).
The conclusion from this is that should be happier working than playing! This is contrary to all the received wisdom about what "work" is and the anomaly is caused by the fact that there is a deep rooted prejudice in our society against work (including school work and studying). This prejudice creates a barrier that prevents us expected (and therefore getting) any enjoyment or happiness from our work.
Other business writers (including David Maister) have long talked about the fact that financial success inevitably follows from doing work that you enjoy with people that you like.
To me the actions that come out of this are:
- First, read the Happier book yourself
- Then find work that you enjoy doing, and happiness and financial success will follow.
Let me know what you think by posting a comment or emailing andrewg@kandh.co.uk or call me on 0118 923 5802.
It is rare that anyone takes a step back and asks why we are striving for the things that goals are suppose to give us.
In other words, will having goals make you happy (assuming that happiness is everyone's ultimate aim, for ourselves and for others)?
A book I have just read called "Happier" (by Tal Ben-Shahar) examines this in more detail and draws some interesting conclusions that all of us who are involved in giving business advice should, I believe, keep in the back of their minds when giving that advice. In a nutshell:
- Happiness as a result of pleasure and purposefulness in life (just one or the other of these is not enough)
- Purposefulness can come from striving for goals (not from achieving them!)
- BUT the goals must be "self concordant" ie consistent with our own personal values and beliefs
- When we are working towards a goal, we can get into a state of "flow", where the balance between boredom and stress is just right and when time passes very quickly.
- We have more of these "flow" experience at work than during our leisure time.
- Money does not create happiness (except in so far as money is the measure by which you judge your progress towards your goals).
The conclusion from this is that should be happier working than playing! This is contrary to all the received wisdom about what "work" is and the anomaly is caused by the fact that there is a deep rooted prejudice in our society against work (including school work and studying). This prejudice creates a barrier that prevents us expected (and therefore getting) any enjoyment or happiness from our work.
Other business writers (including David Maister) have long talked about the fact that financial success inevitably follows from doing work that you enjoy with people that you like.
To me the actions that come out of this are:
- First, read the Happier book yourself
- Then find work that you enjoy doing, and happiness and financial success will follow.
Let me know what you think by posting a comment or emailing andrewg@kandh.co.uk or call me on 0118 923 5802.
Monday, 10 December 2007
Exercise - and improve job performance by 15%
I read an article recent that talked about the how we are all searching for the Holy Grail of more energy and how most of us end up getting the extra energy from quick fix sources like caffeine and sugary food and drinks.
The excuse we use to justify this is that we need the energy to do our jobs and we do not have time to tackle the problem in any other way.
This is particularly relevant to business owners. When I ask business owners how many hours they work each week, the average answer is about 60. In other words, they are doing the equivalent of nearly two full time jobs. And that doesn't include the mind-time and sleepless nights caused by the innumerable stresses inherent in most peoples business.
The article explained that in reality, the "energy" we're chasing is simply mental alertness.The article was part of an e-newsletter from www.AcidAlkalineDiet.com. Here is more from the article, including 3 tips to get more energy naturally and improve your job performance by 15% in the process:
1) Exercise - It doesn't matter what time you exercise, just be consistent. Fit it in based on your schedule and personality. If you have to do it first thing when you wake up, just do it. Don't even let yourself think about it. Just get started. Focus on intense strength training for 20 minutes followed by a brief interval training session to boost your metabolism all day long.
Exercise is a drug. Like caffeine and nicotine, exercise causes the release of many chemicals into your blood, resulting in mental stimulation and an improved sense of overall well-being. Exercise just makes you feel good.
2) Eat smaller, more frequent meals.Skip the cycle of starving and feasting characterized by no breakfast, a high-carbohydrate lunch, and a huge dinner. Instead, eat breakfast and then continue to eat every 3 hours for the rest of the day.Research shows that a high-fiber breakfast helps control appetite and increases mental alertness all morning, and improves your ability to process information. Do not skip breakfast and rely on a coffee to get you through the day.
Got no time? C'mon! You're an adult, you can get up 10 minutes earlier to have a protein shake, some almonds, and an apple. You're not in high school anymore. No excuses!
3) Eat only whole, natural foods, such as fruits, vegetables,organic proteins, raw nuts (not roasted in oil), Green Tea, water.Trying to run on processed foods is a recipe for an energetic disaster. Stick to whole, natural foods during the day, snacking rather than binging on big meals, and you'll never feel like dozing off. If a food is from a bag or a box, it doesn't deserve a place in your nutrition plan. Avoid all added sugars. Surely, you're already sweet enough!
Bonus Tip! Take mini-breaks during the day to work on your mobility. Work environments zap our 'energy'. From poor posture, to eye-strain from computer screens, your office, cubicle, and car seat will suck the life out of you.
According to Men's Health magazine..."British researchers recently found that when people exercised during their workday -- regardless of the duration or intensity of the movement -- they were less likely to feel fatigued, and that translated into a 15 percent improvement in job performance."Daily exercise breaks are essential to not only boost energy, but mobility. Each day, as your computer sucks you into its visual vortex, your upper body becomes rounded forward and tense. You need to reverse that movement.
Here's how...Stick up Stand:
With your back to the wall and feet about 4 inches from the wall. Place the back of your arms against the wall with upper arms parallel to floor and forearms at 90 degrees. Stick up your arms over head while keeping your arm against the wall at all times. Slowly return to below the starting position tucking your elbows into your sides and bringing shoulder blades together. Repeat for 12 reps. Do this every 60-90 minutes. In addition, get outside into natural light whenever possible.
Let me know how you get on!
The excuse we use to justify this is that we need the energy to do our jobs and we do not have time to tackle the problem in any other way.
This is particularly relevant to business owners. When I ask business owners how many hours they work each week, the average answer is about 60. In other words, they are doing the equivalent of nearly two full time jobs. And that doesn't include the mind-time and sleepless nights caused by the innumerable stresses inherent in most peoples business.
The article explained that in reality, the "energy" we're chasing is simply mental alertness.The article was part of an e-newsletter from www.AcidAlkalineDiet.com. Here is more from the article, including 3 tips to get more energy naturally and improve your job performance by 15% in the process:
1) Exercise - It doesn't matter what time you exercise, just be consistent. Fit it in based on your schedule and personality. If you have to do it first thing when you wake up, just do it. Don't even let yourself think about it. Just get started. Focus on intense strength training for 20 minutes followed by a brief interval training session to boost your metabolism all day long.
Exercise is a drug. Like caffeine and nicotine, exercise causes the release of many chemicals into your blood, resulting in mental stimulation and an improved sense of overall well-being. Exercise just makes you feel good.
2) Eat smaller, more frequent meals.Skip the cycle of starving and feasting characterized by no breakfast, a high-carbohydrate lunch, and a huge dinner. Instead, eat breakfast and then continue to eat every 3 hours for the rest of the day.Research shows that a high-fiber breakfast helps control appetite and increases mental alertness all morning, and improves your ability to process information. Do not skip breakfast and rely on a coffee to get you through the day.
Got no time? C'mon! You're an adult, you can get up 10 minutes earlier to have a protein shake, some almonds, and an apple. You're not in high school anymore. No excuses!
3) Eat only whole, natural foods, such as fruits, vegetables,organic proteins, raw nuts (not roasted in oil), Green Tea, water.Trying to run on processed foods is a recipe for an energetic disaster. Stick to whole, natural foods during the day, snacking rather than binging on big meals, and you'll never feel like dozing off. If a food is from a bag or a box, it doesn't deserve a place in your nutrition plan. Avoid all added sugars. Surely, you're already sweet enough!
Bonus Tip! Take mini-breaks during the day to work on your mobility. Work environments zap our 'energy'. From poor posture, to eye-strain from computer screens, your office, cubicle, and car seat will suck the life out of you.
According to Men's Health magazine..."British researchers recently found that when people exercised during their workday -- regardless of the duration or intensity of the movement -- they were less likely to feel fatigued, and that translated into a 15 percent improvement in job performance."Daily exercise breaks are essential to not only boost energy, but mobility. Each day, as your computer sucks you into its visual vortex, your upper body becomes rounded forward and tense. You need to reverse that movement.
Here's how...Stick up Stand:
With your back to the wall and feet about 4 inches from the wall. Place the back of your arms against the wall with upper arms parallel to floor and forearms at 90 degrees. Stick up your arms over head while keeping your arm against the wall at all times. Slowly return to below the starting position tucking your elbows into your sides and bringing shoulder blades together. Repeat for 12 reps. Do this every 60-90 minutes. In addition, get outside into natural light whenever possible.
Let me know how you get on!
Thursday, 15 November 2007
How to make the coffee
At K&H, when we embarked on our systemisation programme in 2004, one of the first systems to go live was how to use our coffee machine.
It is clearly not just us that think this is a priority, as coffee is used the example of how to start systemising (or "systematising" to the Americans) in the resources section of the E-Myth website: http://www.e-myth.com/pub/htdocs/resources. You can get a copy of the system here:
http://www.e-myth.com/media/pdf/CoffeMakingActionPlan.pdf.
The serious point about this is that it shows just how easy it is to start to put systems into place in a business, as long as you have the intention and attention, in Gerber's words. You just write down, step by step, what you do and then save this somewhere that everyone can access it easily.
What was the first system you wrote in your business?
Please tell me about this and your business systemisation challenges at andrewg@kandh.co.uk or by posting a comment here.
It is clearly not just us that think this is a priority, as coffee is used the example of how to start systemising (or "systematising" to the Americans) in the resources section of the E-Myth website: http://www.e-myth.com/pub/htdocs/resources. You can get a copy of the system here:
http://www.e-myth.com/media/pdf/CoffeMakingActionPlan.pdf.
The serious point about this is that it shows just how easy it is to start to put systems into place in a business, as long as you have the intention and attention, in Gerber's words. You just write down, step by step, what you do and then save this somewhere that everyone can access it easily.
What was the first system you wrote in your business?
Please tell me about this and your business systemisation challenges at andrewg@kandh.co.uk or by posting a comment here.
Thursday, 1 November 2007
Be Thin To Cut Cancer- BBC (Post script to my previous post)
Following my last post, my co-director Pauline Williamson has brought to my attention this from the BBC: http://news.bbc.co.uk/1/hi/health/7069914.stm with the results of a survey by the World Cancer Research Fund.
This seems to "prove" the point about the link between diet and serious illness and (in my interpretation) our ability to perform at our peak, in every aspect of life, including business.
This seems to "prove" the point about the link between diet and serious illness and (in my interpretation) our ability to perform at our peak, in every aspect of life, including business.
Wednesday, 31 October 2007
Do you need a great body to have a truly great business??
I have to confess I have fallen behind with listening to the podcasts that I wrote about in my earlier blog. The reason is that recently my time in my “university on wheels” has been spent listening to some other material on a different (but related) theme.
The numbers that this will help change are things like: life expectancy and the percentage of maximum physical wellbeing that we experience. It has already changed (reduced) my weight and waist size!
The subject is diet and how most of us are (put very simply) poisoning our bodies with bad foods and then using other poisons (medicines) to disguise the symptoms. In a bit more detail: the reasoning is that the pH (acid/alkaline) balance of our bodies is thrown out by consuming acid forming foods (like sugars, fat from processed foods and animal sources etc). These are the underlying causes most of the ailments that are usually blamed on viruses and diseases.
The good metaphor is that the diseases are like the mosquitoes on a stagnant pool of water (our bodies) and that to get rid of the mosquitoes we must clean the pool and not simply try to deter the mosquitoes.
This metaphor is used by Anthony Robbins and his audio programme Living Health (see http://www.learnoutloud.com/Catalog/Self-Development/Diet-and-Nutrition/Living-Health/4485 and elsewhere).
The same message is in the book The pH Miracle (http://www.phmiracleliving.com/) and for a more punchy version of a similar message also have a look at http://www.skinnybitch.net/ (thanks to Caroline Eveleigh for this recommendation)
Why is this relevant in a business blog?
Anthony Robbins view is that without a sound body (our temple) we can never achieve our potential in business or any other aspect of life. It is not good having a great, profitable business if we sacrifice other aspects of our lives to achieve it. We must have balance in the wheel of life (see http://www.transitionslifecoaching.co.uk/resources.php)
The numbers that this will help change are things like: life expectancy and the percentage of maximum physical wellbeing that we experience. It has already changed (reduced) my weight and waist size!
The subject is diet and how most of us are (put very simply) poisoning our bodies with bad foods and then using other poisons (medicines) to disguise the symptoms. In a bit more detail: the reasoning is that the pH (acid/alkaline) balance of our bodies is thrown out by consuming acid forming foods (like sugars, fat from processed foods and animal sources etc). These are the underlying causes most of the ailments that are usually blamed on viruses and diseases.
The good metaphor is that the diseases are like the mosquitoes on a stagnant pool of water (our bodies) and that to get rid of the mosquitoes we must clean the pool and not simply try to deter the mosquitoes.
This metaphor is used by Anthony Robbins and his audio programme Living Health (see http://www.learnoutloud.com/Catalog/Self-Development/Diet-and-Nutrition/Living-Health/4485 and elsewhere).
The same message is in the book The pH Miracle (http://www.phmiracleliving.com/) and for a more punchy version of a similar message also have a look at http://www.skinnybitch.net/ (thanks to Caroline Eveleigh for this recommendation)
Why is this relevant in a business blog?
Anthony Robbins view is that without a sound body (our temple) we can never achieve our potential in business or any other aspect of life. It is not good having a great, profitable business if we sacrifice other aspects of our lives to achieve it. We must have balance in the wheel of life (see http://www.transitionslifecoaching.co.uk/resources.php)
I personally have lost count of the number of clients who have told me they work double the normal working week, 60 to 70 hours or more.
I agree with Anthony Robbins about the need for balance. What do you think?
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